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JP Morgan survey suggests institutional investment in crypto is experiencing friction

JP Morgan survey suggests institutional investment in crypto is experiencing friction

Analysts from the international finance and and investment house have released results of an internal poll which surveted 3,400 investors from 1,500 institutions who took part in their Macro Quantitative Conference this year. The study found that over 78% of investors participating in the conference are not likely to invest in crypto, while 97% were of the perception that crypto related crime was either somewhat or very much prevalent.

The results from this poll shows that the positive repute of cryptocurrency and blockchain technologies is shifting, with investors from institutions buying in. The wave of institutional investments to BTC, for example, from industry recognized firms such as MicroStrategy and Tesla, has given the crypto space a sense of legitimacy: a perception that many in the traditional financial and banking industries space share. However, despite this, the likelihood of institutional investors pouring in their portfolios with crypto is overwhelmingly trending to the negative, with more than three quarters of the participants giving a firm no to crypto. Analysts point to the risks associated with crypto as an investment area as one of the primary drivers of this perception.

In a previously released statement, analysts from the firm including JP Morgan Chair of Global Research Joyce Chang and VP for Strategic Research Amy Ho said that “[in] a multi-asset portfolio, investors can likely add up to 1% of their allocation to cryptocurrencies in order to achieve any efficiency gain in the overall risk-adjusted returns of the portfolio.”

Interestingly, some 58% conference's participants hold the belief that cryptocurrency will now remain a staple of the financial world for the foreseeable future, while 7% believe that cryptocurrencies will "become one of the most important assets" as the push to global adoption at scale continues through the latest developments in blockchain technology. About a tenth of the surveyed firms have stated that they have already invested in crypto, although the amounts of these investments were not disclosed. The remaining non-invested firms have 22% of their ranks saying that they're likely to follow up on the strategy, while 78% remain either undecided or firmly negative.

The perception that crypto is a "temporary fad" remains in 21% of the investment firms, while another 14% thought that crypto was "probably rat poison squared," a description attributed to serial investor and billionaire Warren Buffet, who has, since the early days of crypto, had a negative opinion of the technology. With these sentiments laid out, a 77% majority of the investor firms opined that they want or they would urge regulators to develop stricter measures and compliance frameworks for cryptocurrency and blockchain technology regulation.

Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.

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